from the remind-me-what-the-patent-system-is-for? dept

On July 25, 2017, the Patent Office issued a patent to HP on reminder messages. Someone needs to remind the Patent Office to look at the real world before issuing patents.

United States Patent No. 9,715,680 (the '680 patent) is titled "Reminder messages." While the patent application does suggest some minor tweaks to standard automated reminders, none of these supposed additions deserve patent protection.

Claim 1 of the patent states (comments in brackets):

A non-transitory computer-readable storage medium containing instructions, the instructions when executed by a processor causing the processor to [use a computer to]:

receive at a first computer system, via a network, event data descriptive of an event to occur at an event time [get event and time information];

receive via the network, reminder data descriptive of a reminder time to occur on or before the event time [get the reminder time];

at a time after receipt of the event data, receive via the network article data descriptive of an article to be associated with the event, the article data created during an electronic scanning operation [receive some additional information (created by scanning) relating to the event]; and

at the reminder time send via the network a reminder message describing the event and the article to a second computer system, for presentation at the second computer system [at the reminder time, send the reminder message].

Although this claim uses some obscure language (like "non-transitory computer-readable storage medium" and "article data"), it describes a quite mundane process. The "article data" is simply additional information associated with an event. For example, ‘buy a cake' might be included with a birthday reminder. The patent also requires that this extra information be input via a "scanning operation" (e.g. scanning a QR code).

The '680 patent comes from an application filed in July 2012. It is supposed to represent a non-obvious advance on technology that existed before that date. Of course, reminder messages were standard many years before the application was filed. And just a few minutes of research reveals that QR codes were already used to encode information for reminder messages. For example, QRickit suggested using QR codes for calendar events and reminders (with the option of adding additional information beyond the event descriptor). This 2011 article suggests using QR codes to embed information such as "assignments for the week." The only even arguable difference from the prior art is that the patent's claims require the "article data" to be received after the event data. In our view, that is not a distinction that warrants the government-granted monopoly power inherent in a patent.

The Patent Office reviewed HP's application for years without ever considering any real-world products. Indeed, the examiner considered only patents and patent applications. We have complained before that the Patent Office seems to operate in an alternative universe where only patents provide evidence of the state of the art in software. The fact that the Patent Office doesn't take developments in real software into account in its assessment of prior art speaks poorly for its ability to determine whether patent applications actually reflect new inventions.

Even leaving obviousness aside, HP's patent application still should have been rejected under Alice v. CLS Bank.In Alice, the Supreme Court ruled that an abstract idea does not become eligible for a patent simply by being implemented on a generic computer. As with many software patents, the patent goes out of its way to explain that its method can be implemented on a generic computer, or, as the patent puts it "generally any computer." Despite this, the prosecution history [PDF] reveals that the examiner never even mentioned Alice, even in office actions written well after the Supreme Court's decision came down. We have written many times (e.g. 1, 2, 3, and 4) to protest that the Patent Office is not doing enough to diligently apply the Alice decision. The '680 patent provides yet another example of abstract software patents being issued despite the Supreme Court's ruling.

In case you want to set a reminder, the '680 patent will expire on December 16, 2035.

from the who-needs-the-law-when-you-can-bully? dept

Techdirt readers will probably recall a long-running saga involving corporate sovereignty, $500 million, the US pharma company Eli Lilly, and drug patents. In its claim against the Canadian government, made using NAFTA's Chapter 11, Eli Lilly insisted it should have been given some drug patents, despite Canada's courts finding that they had not met the requirements for patentability -- specifically that there was no evidence that the drugs in question provided the benefits in the patent. Eli Lilly said that Canada was being unreasonable in setting a slightly higher bar than other countries by demanding that a patented drug should actually do something useful. As Mike reported back in March, even the lawyers that made up the corporate sovereignty tribunal hearing this case agreed that Canada was within its rights to take this view. They not only dismissed the claim, but ordered Eli Lilly to pay Canada's legal fees.

This reversal in AstraZeneca Canada Inc. v. Apotex, Inc. is particularly disconcerting because Canada had just won an investor-state arbitration award in the long awaited Eli Lilly v. Canada case upholding its more stringent promise/utility doctrine that had been used successfully to overturn two dozen secondary patents, particularly those claiming new uses of known medicines, where patent claimants failed to present evidence in support of the prediction of therapeutic benefit promised in their patent applications.

Thus Canada's Supreme Court has inexplicably thrown away the government's earlier victory, and undermined the country's more rigorous approach to granting pharma patents. Writing for infojustice.org, Brook K. Baker believes this stunning capitulation is a result of unremitting bullying from the US:

Canada had been under intense pressure from the US, which had placed Canada on its Special 301 Watch List for five years threatening that the promise/utility doctrine unreasonably harmed Big Pharma in the US and from the pharmaceutical industry itself which claimed that the doctrine violated global patentability criteria. President Trump's hardball campaign promise to rewrite or leave the North American Free Trade Agreement because of its failure to adequately protect US intellectual property interests may also have played a role. Likewise, President Trump's more recent assertions that US payers are unreasonably subsidizing biomedical research and development because other countries, like Canada, are paying lower prices for innovator medicines than insurers and other payers in the US may also have increased pressure on the Court.

It's really sad to see the Canadian court kowtowing like this, undermining its own independence and moral authority in the process. Weaker patents will lead to the Canadian taxpayer paying higher prices for less-effective drugs. Worst of all, the Big Pharma bullies, aided and abetted by a newly-aggressive US government indifferent to other countries' health problems, will be encouraged to push for even more patent protection all around the world. That will lead not just to higher prices, but to more suffering and avoidable deaths, as crucial medicines become unaffordable for poorer patients.

from the 'our-product-IS-litigation' dept

Another patent troll will be paying out legal fees, thanks to a judge seeing something he didn't like in the plaintiff's long history of lawsuits. Here's the good news, from Daniel Nazer of the EFF.

A district court in California issued an order (PDF) this week ordering Shipping & Transit to pay a defendant's attorney's fees. The court found that Shipping & Transit has engaged in a pattern of “exploitative litigation.”

Shipping & Transit owns a number of patents that relate to vehicle tracking. We’ve written about its patent trolling on numerousoccasions. In many cases, Shipping & Transit asserted its patents against businesses that simply sent email to customers with a tracking number. In other cases, it has sued municipal transport agencies and logistics companies.

This fee award comes as the result of the plaintiff's cut-and-run tactics. As we've seen in countless troll operations, lawsuits that are challenged often result in plaintiffs dismissing suits in hopes of avoiding paying the winning parties' legal fees. (The government does this as well in asset forfeiture cases.) The same thing happened here.

Hall Enterprises, Inc. was targeted by the patent troll in hopes of an easy settlement. That didn't happen. Hall Enterprises pushed back, hoping to have the court find the asserted patents invalid under the Supreme Court's Alice decision. Unfortunately that didn't happen either. Because of the dismissal, the court was unable to rule the patents invalid. But the court does take the time to indicate it would have done so if Shipping and Transit hadn't force quit BaselessLitigation.exe.

An important consideration in evaluating patent subject matter eligibility is whether the claims would preempt use of the abstract idea.

[...]

Here, claim 14 is written so broadly that it could cover the activities of everyone from taxi dispatchers to warehouse delivery coordinators to bike messengers to hotel bellboys. Notably, claim 14 of the ’299 Patent does not recite the use of any specific technology to perform the steps of the claimed method.

[...]

The asserted claims of the ’207 Patent are directed to the same abstract idea of monitoring and reporting the location of a vehicle, and add the concept of using certain information (i.e., caller ID) to look up and transmit information about the vehicle status.

[...]

In this case, the claims are directed not to an improvement of car tracking systems but simply to the use of computers as a tool in the aid of a process focused on the abstract idea of monitoring and reporting vehicle status. That is not enough to constitute patentable subject matter.

The same goes for Shipping and Transit's other patent:

The ’359 Patent does not teach or claim any new hardware, software, or other computer technology for performing this routine process. Claim 19 is not directed to a specific improvement to the way computers operate, nor does Plaintiff contend as much. Rather, it merely implements an old practice in a new environment…

Once this is established, the court moves on to the legal fees. The plaintiff argued its dismissal should prevent a fee shift. The court, looking over the plaintiff's long history of trolling efforts, disagrees.

Plaintiff responds that the filing of numerous cases without more does not make a case exceptional. (Dkt. 23 at 9.) Plaintiff admits that the average license fees have been between $10,000 and $25,000, but argues that they properly reflect “the uncertainties of the ever-evolving § 101 jurisprudence and the value of previous licenses granted under the Patents-in-Suit to similarly situated [d]efendants.” (Id. at 10.)

Although the Court agrees that filing a large number of cases does not necessarily mean Plaintiff litigated in an unreasonable manner, it nevertheless finds troubling that Plaintiff has repeatedly dismissed its own lawsuits to evade a ruling on the merits and yet persists in filing new lawsuits advancing the same claims. Specifically, Plaintiff has filed similar lawsuits (more than 90 for the ’207 and ’297 Patents and more than 400 for the ’359 Patent) against countless defendants. Patent litigation is expensive, so it is unsurprising that the vast majority of accused infringers choose to settle early rather than expend the resources required to show a court that the Patents-in-Suit fail under § 101. When the few challenges do occur, however, they are promptly met with voluntary dismissals with prejudice, as in this case.

The court goes on to point out the plaintiff could have saved itself some money if it had just dismissed the suit as soon as the defendant made it clear it would challenge the patent's validity. Instead, it chose to call to keep racking up its opponent's billable hours.

Here, Defendant has made clear from the start its position that the asserted claims were invalid under § 101, and its intent to seek early judgment of invalidity plus attorney fees if Plaintiff did not dismiss its case. If Plaintiff had dismissed its case by October 15 as requested, most of the attorney fees would have been avoided. Instead, Plaintiff forced Defendant to incur the expense of filing the § 101 motion, which predictably led to Plaintiff voluntarily dismissing the case.

Finally, the judge calls a troll a troll:

Plaintiff’s business model involves filing hundreds of patent infringement lawsuits, mostly against small companies, and leveraging the high cost of litigation to extract settlements for amounts less than $50,000. These tactics present a compelling need for deterrence and to discourage exploitative litigation by patentees who have no intention of testing the merits of their claims. Based on the totality of the circumstances, the Court finds that this is an “exceptional” case.

If Shipping and Transit is willing to expedite the settlement process -- albeit one where it's on the losing end -- the judge has proposed a $20,000 award. If not, it may find itself paying out even more. Given its love of settlements, you'd think the troll would jump at this opportunity to walk away before it loses any more money. This ruling is sure to be referred to by defendants in other lawsuits -- especially anything that suggests the patents are invalid -- so it's likely Shipping and Transit will be hurriedly filing more motions to dismiss in the near future.

from the counting-patents-on-a-computer dept

This month's stupid patent, like many stupid patents before it, simply claims the idea of using a computer for basic calculations. U.S. Patent No. 6,817,863 (the '863 patent) is titled "Computer program, method, and system for monitoring nutrition content of consumables and for facilitating menu planning." It claims the process of using a computer to track nutrition information like calorie or vitamin intake. It is difficult to think of a more basic and trivial use for a computer.

The '863 patent is owned by a patent troll called Dynamic Nutrition Solutions, LLC. Dynamic Nutrition filed a lawsuit this month in the Eastern District of Texas accusing Australian company Fatsecret of infringing the '863 patent. Dynamic Nutrition had filed four other lawsuits. Consistent with a pattern of nuisance litigation, each of those earlier suits settled very quickly.

What "invention" does the '863 patent purport to cover? Claim 1 of the patent is reproduced in full below (with comments in brackets):

A computer program comprising a combination of code segments stored in a computer-readable memory and executable by a processor to provide nutrition content information related to consumables, the computer program comprising:

a code segment operable to receive and store an input related to consumption of consumables, and to associate the input with a calender [sic] date [i.e. program a computer to track daily food intake]; and

a code segment operable to generate an interactive display screen, wherein the interactive display screen includes— [i.e. include some kind of user interface]

one or more lists of consumables and related nutrition content information, and [i.e. list food options and nutrition information]

In other words, program a computer to help people keep track of meals and calorie or vitamin intake.

The application for Dynamic Nutrition's patent was filed on June 11, 2001. By that time, computers had been around for decades and there was nothing remotely surprising or innovative about programming a computer to keep track of data—whether it be nutrition data or units shipped or accounts receivable or whatever. Nevertheless, the Patent Office takes an extremely rigid approach to whether or not a patent application is obvious. This means that companies often get patents on common sense ideas (like taking photos against white background or filming a yoga class).

Even leaving aside the issue of obviousness, the claims of the '863 patent are invalid under the Supreme Court's Alice v. CLS Bankdecision (which struck down patents that merely claim the use of conventional computers to implement an abstract idea). Indeed, the first company to be sued by Dynamic Nutrition, Under Armour, filed a motion to dismiss the case under Alice. Under Armour pointed out that the '863 patent itself repeatedly emphasizes that its methods can be implemented using any conventional computer or programming language. Given the strength of this argument, it is unsurprising that the litigation settled before Dynamic Nutrition even filed a response.

Dynamic Nutrition's patent is not even the only patent that claims using a computer for routine meal planning. A patent troll called DietGoal sued dozens of companies with a meal planning patent. A court invalidated DietGoal's patent under Alice because it claimed nothing more than the "conventional and quotidian tasks" of selecting meals. The Federal Circuit affirmed that ruling. The logic of this decision applies straightforwardly to Dynamic Nutrition's patent claims.

We recently launched our Saved By Alice project where we are highlighting cases where companies attacked by stupid software patents were able to use the Alice decision to defend themselves against weak patent suits. The Dynamic Nutrition litigation is yet another example of why the Alice ruling is important and how it can protect productive companies from patent trolls.

from the um,-guys? dept

For all the talk of "fake news" going around these days, you'd think that the federal government would avoid creating more of its own on purpose. And you'd think that the MPAA and RIAA would know better than to join in on such a project. However, the following email was sent to some folks at Stanford Law School asking the law school to join in this fake news project promoting intellectual property via a fake Twitter feud:

Good Morning! My name is H------, and I am reaching out to you from the State Department’s Bureau of Economic Affairs. I gave you call a little earlier this morning, but I thought I would follow up with an email as well.

Currently, I am working on a social media project with the Office of Intellectual Property Enforcement. This summer, we want to activate an audience of young professionals- the kind of folks who are interested in foreign policy, but who aren’t aware that intellectual property protection touches every part of their lives. I think the law school students at your institution may be the type of community that we would like to engage. Additionally, we know that your law school is ranked among the top schools in Intellectual Property law, and thus our campaign may not only be fun, but relevant for you all as well.

So a little bit of a recap from the message that I left you this morning. The Bureau of Economic and Business Affairs wants to start a fake Twitter feud. For this feud, we would like to invite you and other similar academic institutions to participate and throw in your own ideas!

The week after the 4th of July, when everyone gets back from vacation but will still feel patriotic and summery, we want to tweet an audacious statement like, “Bet you couldn’t see the Independence Day fireworks without bifocals; first American diplomat Ben Franklin invented them #bestIPmoment @StateDept” Our public diplomacy office is still settling on a hashtag and a specific moment that will be unique to the State Department, but then we invite you to respond with your own #MostAmericanIP, or #BestIPMoment. Perhaps it will an alumni defending intellectual property in the courts or an article that your institution has produced regarding this topic.

Some characters from the IP community here in DC have agreed to participate with their own tweets: US Patent and Trademark Office, the Copyright Alliance, the Motion Picture Association of America, the Copyright Office, and the Recording Industry Association of America. We hope to diversify this crowd with academic institutions, sports affiliations, trade associations, and others!

Please give me a call or email me with any questions, comments, or concerns. I look forward to hearing from you soon!

Sincerely,
H--------
Official
UNCLASSIFIED

So, let's break this down. This is literally the State Department, working with the IP Enforcement Coordinator (normally called the "IP Czar") to team up with the MPAA, RIAA and Copyright Alliance (a front group for the RIAA and MPAA), along with the Patent & Trademark Office and the Copyright Office to create a fake Twitter feud over who likes copyright and patents more.

Everything about this is crazy. First, the State Dept. should not be creating fake news or fake Twitter feuds. Second, even if it were to do so, it seems to have picked one side of the debate, arguing that greater copyright and patent enforcement is obviously a good thing (how far we've come from the time when it was the State Department that fought back against SOPA and told the White House not to support it).

Separate from that, why are the MPAA, the RIAA and the Copyright Alliance agreeing to team up with the US government to create fake stories? That seems... really, really wrong. I get that they are obsessed with always pushing a misleading and one-sided message on copyright law, but creating out and out propaganda with the US government?

Also, even if the geniuses at IPEC -- an office that was set up in 2008 under another anti-piracy copyright law -- falsely believe it's their job to push Hollywood's message out to the world, how could they possibly have thought it was a bright idea to engage in outright propaganda using Twitter... and to try to enlist law school professors and students in these shenanigans?

I've put out a request for comment from the State Department's Bureau of Economic Affairs, and will update this post if I hear back.

from the this-is-just-bad dept

It's not secret that we still desperately need comprehensive patent reform to fix the many, many problems of our patent system. Even as the Supreme Court has spent the past twelve years repeatedly fixing broken parts of patent law one piece at a time (by repeatedly smacking down awful decisions by the Court of Appeals for the Federal Circuit) there's still much more that can, and should, be done. To date, most of these efforts are being blocked by powerful pharmaceutical interests, with some help from short-sighted trial lawyers who fear things like fee shifting (i.e., "loser pays") coming to patent law. With broad bipartisan support for real patent reform, it's really just been a few well-connected organizations that have blocked the whole thing from going through.

But, apparently, those groups have a friend in Senator Chris Coons, who last week introduced a patent reform bill so bad that it would basically wipe out pretty much all of the major gains towards fixing the patent system from the past twelve years. It's that bad. And shame on Senators Tom Cotton, Dick Durbin and Mazie Hirono for co-sponsoring the bill. It's unfathomably bad and would destroy innovation in many parts of the country. You know the bill is going to be bad when it conflates monopoly patent rights with traditional property rights, despite the two being entirely different things:

“Strong rights in property—whether intellectual or tangible—have been a key driver behind U.S. economic might. Eroding such rights would imperil innovation and job growth, so we need to maintain strong patent protections if we want our economy to grow at full speed,” said Senator Cotton. “I’m glad to see my colleagues from both sides of the aisle understand just how important patent rights are to our future. And I believe this bill will make sure intellectual-property rights are treated with the same respect as all our other rights.”

Except, of course, this is not an accurate description of patents at all. When patents are too "strong" they impede and hinder innovation. They slow down, limit, or outright kill important improvements and follow-on innovations. They work on the truly wrong concept that whoever comes up with an idea "first" is best able or equipped to actually successfully execute and bring things to market. They work on the assumption that less competition improves innovation when basically all evidence points in the other direction.

There are so many bad parts in the bill, it's tough to talk about them all. Josh Landau, over at Patent Progress, however has a pretty thorough breakdown. We'll break the problems into two sections ourselves (though, again, there's much more). First up, trying to kill the inter partes review process (IPR). IPR is very much under attack these days which is stupid and unfortunate.

Here's the idea behind the IPR system: sometimes (perhaps frequently!) the US Patent Office makes a big mistake and grants a patent that should not have been granted. This is not a theoretical problem. Studies have shown repeatedly that there has been an explosion in questionable patents approved in the last couple decades. There are lots of reasons for this, many of which we've discussed in previous posts, but hopefully everyone should be able to admit that if a patent that should not have been granted at all under the law, is still granted there is a clear harm to innovators and the public, in that innovators are blocked from innovating -- or are charged an unnecessary fee. There's a real and noticeable problem.

So, implemented back in 2012 under the America Invents Act, the concept behind IPR, is that the validity of a patent can be reviewed by a special tribunal at the US Patent Office to determine if the patent is valid. It's basically a good safety valve on the fact that patent examiners were often under pressure to approve patents just to clear out the docket faster, rather than worrying about whether or not something was truly valid. Seems like a good idea, but trolls and pharma companies hate it so much. The Supreme Court is going to hear a case soon looking at the Constitutionality of the IPR process -- described in the article linked above as determining if the USPTO is "allowed to change its mind."

But the Coons bill, if passed, would do away with the need for SCOTUS to review, because it would basically wipe out the IPR process. Landau summarizes just a few of the changes to the IPR process in this bill:

If a patent claim has ever been IPRed, no one else can ever IPR it again, no matter who they are or if they have totally new art.

You can never file multiple petitions against the same patent, even if it has 300 claims.

The Patent Office can never revisit a patent once a federal court has.

Patent owners can appeal institution of an IPR before the final written decision, but petitioners can’t appeal denial of institution.

Only people who have actually been sued can file an IPR.

Anyone who financially supports the petitioner becomes a real party in interest.

Unlike everywhere else in the Patent Office, you have to prove claims are invalid by clear and convincing evidence using a narrow construction rather than the broadest reasonable interpretation.

Patent owners are effectively entitled to amend their claims.

Patent owners can, instead of going through IPR, ask to go through an “expedited reexamination,” allowing them to change their claims and have their patent treated as if it was a fresh application. The petitioner isn’t involved in the reexamination, so it’s just the patent owner and the Patent Office

To show just how dumb this would be, Landau uses the example of the infamous podcasting patent troll, Personal Audio. As you may recall, after much effort, EFF was able to help bust the key patent held by Personal Audio, using the IPR process, and protecting tons of podcasters in the process. But would that still work if this bill became law? Not likely.

EFF was never sued by Personal Audio. They couldn’t have filed their IPR at all. The story would end here, even though that patent was invalid.

The requirement that you actually be sued goes too far. A patent owner can wait until people have built up businesses before suing, and in the interim, no one can challenge their patent. An IPR would let me see if the patent is valid before I invest resources in developing my product. Requiring an actual lawsuit before filing an IPR would incentivize patent owners to sit and wait until products are developed and profitable before filing their lawsuits.

[....]

Next, EFF would have to identify the “real party in interest” for the IPR. After the STRONGER Patents Act, that includes anyone who:

directly or through an affiliate, subsidiary, or proxy, makes a financial contribution to the preparation for, or conduct during, an inter partes review on behalf of the petitioner

So, did you donate to EFF during the past 4 years? Congratulations, you’re now a real party in interest to the podcasting IPR.

That means that you can’t challenge the patent in court if you’re ever sued. It also means that if you were sued on the patent more than 1 year ago, then EFF would have been prevented from filing the IPR. It means that, if EFF failed to name you in their petition as a real party in interest, the patent owner can ask for the petition to be denied because of that failure. And it means that anyone else you contribute to winds up prevented from challenging the validity of the patent anywhere (including in court.)

And it doesn’t stop there. If I’m a startup developing new technology and I file an IPR, any VC who funds me during the process is a real party in interest. If that VC then funds another company, that company can no longer file an IPR or challenge the validity of the patent. VCs will be wary of funding anyone who’s filed an IPR as a result, and startups who have to choose between an IPR and funding are going to pick funding.

Even more bizarre is taking away the adversarial nature of an appeal. One of the key problems with today's patent system is the total lack of an adversarial interest in determining if a patent was valid. If you only ever hear from one side of a debate, you're likely to identify much more with that side. But here, Coons is trying to shift the system to vastly limit any sort of adversarial process:

And let’s assume, as happened in real life, that the PTAB decided that there was a reasonable likelihood EFF would invalidate at least one of Personal Audio’s patent’s claims. The PTAB would decide to institute the IPR.

At which point the STRONGER Patents Act gives the patent owner to appeal the institution if there were procedural defects (like failing to name all the real parties in interest, being filed after a year from a lawsuit, or—new to the STRONGER Patents Act—if someone else had previously challenged the claim.) They can appeal even though the patent owner had every opportunity to point these defects out before the decision on institution was made.

But for some reason it doesn’t give the petitioner the right to appeal a denial if the denial was made for a procedural defect. You can only appeal if the patent is determined likely to be invalid. Seems “balanced,” doesn’t it?

Those supporting this bill want the world to believe that any challenge to a patent's validity is a de facto problem that needs to be stopped. The reality, though, is that getting rid of bad patents quickly is a key part of our patent system today, that is quite frequently a big part of why bad patents are getting thrown out and some patent trolls have struggled.

Oh and then there's this bit of total nonsense:

The STRONGER Patents Act also creates a new procedure, called the “expedited IPR reexamination.” This is itself a misnomer, because the “inter partes” in IPR means “between parties,” and the expedited reexamination explicitly does not include the petitioner, only the patent owner.

But setting aside the deceptive labeling, the expedited reexamination means that when an IPR is instituted, instead of actually responding to the IPR, the patent owner can simply request to cancel all their claims, file amended claims, and request a new examination of their patent. In this examination, it goes back to a regular patent examiner. The petitioner is totally cut out of the process.

So Personal Audio could simply go through reexamination, add some meaningless limitations to their claim, and come back with their patent. And by this point, it’s probably been more than a year since Personal Audio sued Adam Carolla, which means that EFF and Carolla are barred from challenging the new claims. (And if it hasn’t been more than a year, well, if it gets instituted then they can just request another expedited reexamination to keep running out the clock.)

This is bad, bad stuff. The IPR process is relatively new, but already quite important, and this bill would effectively wipe it out in its infancy.

The second major problem with the bill is that it basically targets a bunch of the Supreme Court rulings from the past few years that have helped massively fix problems with the patent system. Rather than applauding this and pushing SCOTUS to continue to clean up these messes, it often goes the other way. Here's Landau again, talking about how it would effectively reject SCOTUS's ruling in eBay v. Mercexchange -- one of the earlier patent cases the Supreme Court took in this new century to smack down CAFC and bring back some sanity. This is the case that says maybe, even if there's infringement, the optimal solution should NOT be a total injunction against the entire product:

For example, § 106 of the bill “restores the presumption of injunctive relief upon a finding that a patent is valid and infringed.” In 2005, the Supreme Court decided the opposite in the eBay v. MercExchange case. The FTC’s 2003 “To Promote Innovation” Report highlighted the reasons why an automatic rule in favor of injunctions harms innovation and the economy, in particular noting that because injunctions typically issue after a product has been designed and manufacture has begun, injunctions put patent owners in a position to demand a “supra-competitive royalty rate.”

The Coons bill would bring us back to the world in which a patent troll who patented a lug nut on a car could get an injunction on the entire car. That forces the manufacturer to choose between halting production on the entire vehicle until they can redesign and reorganize their manufacturing process (an incredibly expensive process) or paying the troll more than their lug nut’s technical value justifies. That’s not promoting innovation, or the economy—in fact, it’s the opposite.

There's much more in there as well, most of which is covered by Landau. EFF also has a great blog post on how problematic this bill is, noting that it seems peculiarly designed to drive innovation overseas.

This bill is dangerous. It takes the past fifteen years or so of a gradual march towards fixing a very broken patent system... and gets rid of nearly all of it.

from the nominal-East-Texans-to-experience-lifestyle-changes dept

Winning the never-coveted "Stupid Patent of the Month" award is no honor. In fact, it sometimes enrages recipients to the point of sueball-throwing. But there is definitely a large amount of schadenfreude to be enjoyed by onlookers -- perhaps no more so than in the case of 2015 "SPotM" winner, conspiratorially-monikered Rothschild Connected Devices Innovations, LLC (whose limited liability fails to save it).

Rothschild "invented" a method of hooking up a mixing device to the internet to allow consumers to produce custom blends of their own. Prior art should have invalidated it, but didn't. Instead, the stupid patent allowed Rothschild to go after anyone who allowed users to customize anything over the internet. In one case, Rothschild applied its super-vague patent to a remotely accessible thermostat, arguing this was patent infringement because it allowed users to remotely customize temperatures. To cap off its troll pedigree, Rothschild filed all of its infringement lawsuits in the Eastern Texas District.

Now it's being told by the Federal Circuit Court of Appeals it must shell out some money for its disingenuous claims and litigation. (h/t The Technologist) As the opinion details, Rothschild tried to dismiss the lawsuit once it became apparent it wasn't going to win. The defendant served Rothschild with notice the patent would likely be found invalid after examination, as its first patent claim was ineligible for protection under federal law. ADS (the defendant) offered to settle for $43,000 in legal fees. Rothschild refused.

ADS then filed a motion to dismiss, using the same information it had given to Rothschild. It also included prior art that further bolstered its claims about the patent's lack of validity. Rothschild quickly moved to dismiss the case, hoping to avoid both a settlement or being stuck with paying the defendant's legal fees. This attempt failed.

ADS moved to block the dismissal, detailing Rothchild's long history of patent trolling. From the decision [PDF]:

ADS opposed and filed a cross-motion for attorney fees pursuant to § 285,4 see J.A. 249, based on its view that Rothschild’s suit was objectively unreasonable because Rothschild knew or should have known that claim 1 covers patent-ineligible subject matter under § 101 and is anticipated by prior art under § 102(a)(1), see J.A. 261–64. ADS also argued that Rothschild did not intend to test the merits of its claim and instead filed this and over fifty other lawsuits in the District Court to “‘exploit[] the high cost to defend complex litigation to extract nuisance value settlements’” from various defendants.

The district court, however, granted the motion to dismiss and stated Rothschild's abuse of its likely-invalid patent was evidence of nothing. The Appeals Court reverses this decision, pointing out the lower court ignored evidence and statements presented to it by ADS almost as much as Rothschild did.

The District Court clearly erred by failing to consider Rothschild’s willful ignorance of the prior art. In its Safe Harbor Notice and Cross-Motion for attorney fees, ADS included prior art that purportedly anticipates claim 1 of the ’090 patent. In response to ADS’s Cross-Motion for attorney fees, Rothschild submitted two affidavits relevant here. In the first, Rothschild’s counsel stated that he had “not conducted an analysis of any of the prior art asserted in [the] Cross[-]Motion to form a belief as to whether that prior art would invalidate” the ’090 patent. In the second, Rothschild’s founder echoed these statements. However, in the same affidavits, Rothschild’s counsel and founder both assert that they possessed a “good faith” belief that the ’090 patent “is valid.” It is unclear how Rothschild’s counsel and founder could reasonably believe that claim 1 is valid if neither analyzed the purportedly invalidating prior art provided by ADS. More problematic here, the District Court did not address these incongruent statements in its analysis.

[...]

In his declaration, Rothschild’s counsel states that he “reviewed publicly available information regarding ADS’s products and, in good faith, made a determination that the accused products infringed at least claim 1 of the [’090 patent].” Rothschild’s founder makes similar statements in his declaration. However, neither Rothschild’s counsel nor its founder supports their declaration statements with examples of websites, product brochures, manuals, or any other publicly available information that they purportedly reviewed. The conclusory and unsupported statements from Rothschild’s counsel and founder that claim 1 of the ’090 patent is valid have no evidentiary value.

As for Rothschild's long history of East Texas trolling, the Appeals Court has this to say:

According to ADS, Rothschild has asserted claim 1 of the ’090 patent in fifty-eight cases against technologies ranging from video cameras to coffeemakers to heat pumps. Appellant’s Br. 9. Further, ADS contends that Rothschild has settled the vast majority, if not all, of these cases for significantly below the average cost of defending an infringement lawsuit.

The District Court rejected ADS’s contention, finding “the fact that a patentee has asserted a patent against a wide variety of defendants and settled many of those cases . . . does not alone show bad faith.” The District Court based this aspect of its analysis on a clearly erroneous assessment of the evidence. The District Court predicated its finding on “the absence of any showing that [Rothschild] acted unreasonably or in bad faith in the context of this suit.” However, as explained above, that ancillary finding improperly rests upon statements from Rothschild’s counsel and founder that have no evidentiary value. Therefore, in the absence of evidence demonstrating that Rothschild engaged in reasonable conduct before the District Court, the undisputed evidence regarding Rothschild’s vexatious litigation warrants an affirmative exceptional case finding here.

This being an "exception case," ADS is entitled to legal fees. The $43,000 Rothschild tried to duck by dismissing the suit is awarded to the defendant on reversal.

This will hopefully be the beginning of the end for this patent troll. A Supreme Court decision shutting down forum shopping -- primarily by making the Eastern District of Texas far more difficult to exploit -- should drive another nail into Rothschild's coffin. I'm sure it never had any intention of paying anything out to anyone, as is the nature of all IP trolling operations. Once the judgments start going the other way, it's difficult to continue to capitalize on this super-shady "business model."

from the please-tell-me-again-why-making-drugs-unaffordable-will-save-lives dept

Here on Techdirt we've written much about the way Western pharma companies fight for their "right" to charge unaffordable prices for medicines in emerging and developing economies. In particular, they routinely take governments and local generic suppliers to court in an attempt to shore up highly-profitable monopolies on life-saving drugs. But to be fair, it's not only poorer people who are dying as a result of Big Pharma's desire to maximize profits: Western drug companies are equally happy to charge even higher prices in richer countries -- notably in the US. That's old news. But there is a pharmaceutical saga unfolding that manages to combine all the worst aspects of this kind of behavior, and to throw in a few new ones.

It concerns something really exciting and important: a vaccine that shows great promise against the devastating Zika virus, which can cause microcephaly, blindness, deafness, and calcification of the brain in children whose mothers were infected during their pregnancy. If effective, such a vaccine could be a tremendous boon not just for developing countries, but for Western ones too, since the Zika virus has already begun to spread in the US, and Europe. The vaccine was developed at the Walter Reed Army Institute for Research, and the Department of the Army funded its development. Great news, you might think: the US public paid for it, so it's only right that it should have low-cost access to it. Moreover, as an act of compassion -- and to burnish its international image -- the US could allow other countries to produce it cheaply too. But an article in The Nation reports that the US Army has other ideas:

the Army is planning to grant exclusive rights to this potentially groundbreaking medicine -- along with as much as $173 million in funding from the Department of Health and Human Services -- to the French pharmaceutical corporation Sanofi Pasteur. Sanofi manufactures a number of vaccines, but it's also faced repeated allegations of overcharges and fraud. Should the vaccine prove effective, Sanofi would be free to charge whatever it wants for it in the United States. Ultimately, the vaccine could end up being unaffordable for those most vulnerable to Zika, and for cash-strapped states.

The Knowledge Ecology Institute (KEI), led by Jamie Love, made a reasonable suggestion to ensure that those most at need would have access to the drug at a reasonable price. KEI asked that, if Sanofi does get an exclusive deal, it should be obliged to make the vaccine available at an affordable price. The Army said it lacked the ability to enforce price controls, but it would ask those nice people at Sanofi to commit to affordable pricing on a voluntary basis. According to The Nation, those nice people at Sanofi refused. Speaking of nice people at Sanofi, the article notes the following:

Sanofi's record also includes a number of controversies related to its pricing practices, from a $190 million fine to settle charges that it defrauded Medicare and other government programs, to a $109 million fine to settle charges that it illegally provided product kickbacks to doctors. In 2014, a whistle-blower alleged the company engaged in another kickback scheme and the destruction of legal evidence. KEI maintains a comprehensive list of Sanofi's fraud fines, including the latest: a $19.9 million settlement, reached this April, for overcharging the Department of Veterans’ Affairs.

When there is an entire Web page dedicated to listing Sanofi's problems going back to 2009, you really have to wonder why the US Army is so keen to give the company a monopoly on this promising new treatment. The usual argument for the sky-high prices of drugs is that firms must be rewarded for taking on the financial risk of drug development, otherwise they won't proceed, and the world would be the poorer. Except, of course, in this case that risk was entirely borne by the US public, which paid for the early stage development of the vaccine with their taxes. So Sanofi risked nothing, but now looks likely to reap the benefits by being allowed to price the vaccine out of the reach of the people who most need it. You might think there ought to be a law against this kind of behavior. It turns out that there is:

KEI's Jamie Love pointed out that under the Bayh-Dole Act of 1980, it is already illegal to grant exclusive rights to a federally owned invention unless the license holder agrees to make it available at reasonable pricing. But that provision has rarely, if ever, been enforced.

from the that's-not-how-it-works-at-all dept

While Congress is still doing its thing to try to make the US healthcare system an even bigger laughingstock around the world, the White House is apparently considering an executive order targeting high drug prices. Of course, it handed this power over to Joe Grogan, a (very recent) former lobbyist for a giant pharma company, Gilead, that has been at the center of some controversy over its highly priced drugs. Grogan is apparently leading this effort despite not having an ethics waiver, which means he's supposed to recuse himself from these discussions, rather than lead them. But, you know, that's not happening in the swampy, swampy waters of Washington DC. So just what would Grogan suggest as a way to lower drug prices? How about extending pharmaceutical patents? Yes. Extending.

The documents reveal behind-the-scenes discussions influenced by the pharmaceutical industry. Joe Grogan, associate director of health programs for the Office of Management and Budget (OMB), has led the group. Until March, Grogan served as a lobbyist for Gilead Sciences, the pharmaceutical company that priced its hepatitis C drugs at $1,000 per pill.

To solve the crisis of high drug prices, the group discussed strengthening the monopoly rights of pharmaceuticals overseas, ending discounts for low-income hospitals and accelerating drug approvals by the Food and Drug Administration. The White House declined to comment on the working group.

In what world does anyone with even the slightest economic knowledge think that extending/expanding monopoly powers would bring prices down rather than up? Want to know one of the reasons why drugs are so crazy expensive right now? It's because those monopoly rights have already gone way too far. If you want lower prices, you want competition in the market, not monopoly suppliers who know they're dealing with major health issues -- and the willingness of insurance companies to pay through the nose.

You can criticize all sorts of things about the way healthcare is handled in this country, or how drug prices are determined. But, it's impossible to see how anyone with a straight face could possibly claim that increasing patent rights would lead to lower prices. Of course, the argument here is effectively that by making patent powers greater overseas, the big pharma companies can milk foreigners for higher drug prices... which would make it easier for them to drop drug prices at home. Here are the details from the report:

Extending the patent life of drugs in foreign markets to “provide for protection and enforcement of intellectual property rights.” This will ensure “that American consumers do not unfairly subsidize research and development for people throughout the globe.”

Except, raise your hand if you think that drug companies would voluntarily lower drug prices in the US, just because they can now also price gouge sick people in other countries? Yeah, didn't think so. If you want to lower drug prices, the way to do it is to cut back the monopoly powers of Big Pharma so that they're actually forced to compete more. This isn't a theoretical or academic claim. Just look at the price of drugs after one goes off patent. They immediately drop. Want cheaper drugs? Ditch the patents and watch the market do its thing.